Correlation Between Dine Brands and AW Revenue

Can any of the company-specific risk be diversified away by investing in both Dine Brands and AW Revenue at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dine Brands and AW Revenue into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dine Brands Global and AW Revenue Royalties, you can compare the effects of market volatilities on Dine Brands and AW Revenue and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dine Brands with a short position of AW Revenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and AW Revenue.

Diversification Opportunities for Dine Brands and AW Revenue

-0.3

Correlation Coefficient

Dine Brands  AW Revenue

Very good diversification

The 3 months correlation between Dine and AWRRF is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and AW Revenue Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AW Revenue Royalties and Dine Brands is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dine Brands Global are associated (or correlated) with AW Revenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AW Revenue Royalties has no effect on the direction of Dine Brands i.e., Dine Brands and AW Revenue go up and down completely randomly.

Pair Corralation between Dine Brands and AW Revenue

If you would invest  2,676  in AW Revenue Royalties on October 8, 2024 and sell it today you would earn a total of  0.00  from holding AW Revenue Royalties or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Dine Brands Global  vs.  AW Revenue Royalties

Dine Brands Global

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dine Brands Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Dine Brands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AW Revenue Royalties

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days AW Revenue Royalties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly inconsistent basic indicators, AW Revenue reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dine Brands and AW Revenue

The main advantage of trading using opposite Dine Brands and AW Revenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands position performs unexpectedly, AW Revenue can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AW Revenue will offset losses from the drop in AW Revenue's long position.

The idea behind Dine Brands Global and AW Revenue Royalties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.